Sensex, Nifty hit record highs; private banks gain

Indian shares touched record highs on Monday led by stocks of private lenders, with better-than-expected growth in industrial output and a global equities rally boosting sentiment.

India’s industrial output grew 8.4 percent in November from a year earlier, government data showed, well above the 4.4 percent growth forecast by economists in a Reuters poll.

Asia shares ex-Japan hit historic highs after Wall Street extended its record-breaking run as banks reported solid fourth-quarter earnings and robust retail sales drove investor optimism about economic growth.

“Indian markets have rallied in line with global markets. Liquidity is also very strong and is equally driving markets,” said Anita Gandhi, whole-time director at Arihant Capital Markets.

The data on Friday has given comfort that industrial production is improving substantially, she said.

The Nifty, which breached the 10,700 level for the first time ever, was up 0.86 percent at 10,773.45 as of 0541 GMT. The benchmark Sensex was 1 percent higher at 34,937.15.

Both the indexes were on track to post their third session of gains.

The Nifty private bank index rose as much as 1.3 percent to hit an all-time high.

ICICI Bank Ltd climbed as much as 4.1 percent after Morgan Stanley raised its target price on the stock.

“Structurally, we like Indian financials, primarily private lenders, given growth outlook,” said Morgan Stanley analysts in note.

Other private lenders also rose, with HDFC Bank Ltd and Kotak Mahindra Bank Ltd gaining more than 1 percent each.

Non-bank lender Capital First Ltd surged as much as 7.7 percent to its highest since Feb 2008 after IDFC Bank said it would buy the company in a share swap deal valued at about $ 1.5 billion.

Reporting by Jessica Kuruthukulangara in Bengaluru; Editing by Biju Dwarakanath